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Independence vote

Loganair is ending its longstanding franchise agreement with Flybe, opting instead to go it alone. Martin Rivers looks at the possible options while a new business strategy is being finalised

Loganair’s decision to end its franchise agreement with Flybe amounts to a dramatic vote for independence by the Scottish carrier, returning commercial decision-making to Glasgow after 24 years as a white-label operator.


The airline has promised to create a ‘bold new corporate identity’ when it parts ways with Flybe in September, most noticeably by phasing in a Scottish livery with an eye-catching red and black tartan design. An in-house reservations system should be live by March [2017], enabling the company to take direct bookings through its website.


Independence will further allow Loganair to take back control of its product and pricing strategy, amid accusations of poor service standards and exorbitant inter-island fares under Flybe’s watch.


Customer complaints peaked in 2015, when a Facebook campaign was launched to pressure management over return fares of more than £150 on the 85-mile hop between the Orkney and Shetland Isles – dubbed ‘mile-for-mile Europe’s most expensive flight’ by campaigners. The high charges came despite the Scottish government’s publicly funded Air Discount Scheme, which gives locals discounts of up to 50%on eligible routes.


On the product front, Managing Director Jonathan Hinkles has already promised to retain complimentary checked luggage for all customers – a policy which was causing friction with Flybe’s own strategy of unbundling fares.


His team will also look to build on progress in turning around the carrier’s chequered punctuality rating, which led locals to dub the franchise operation ‘Flymaybe’ in recent years. On-time performance rates – reflecting arrivals within 15 minutes of their scheduled time – rose from about 75% in 2015 to 89% last October, buoyed by a recruitment drive for engineers.


Loganair currently deploys a fleet of 28 aircraft, ranging in size from the eight-seat Britten-Norman Islander to the 50-seat Saab 2000. The airline flies between 20 airports in Scotland, including mainland cities such as Edinburgh, Glasgow and Aberdeen, and smaller island gateways in the Hebrides, Orkney and Shetland archipelagos. Some of its thinner intra-Scottish routes are operated under public service obligation (PSO) contracts, providing a lifeline to remote communities


One of those PSO routes – between the Orkney Islands of Westray and Papa Westray – is reputed to be the world’s shortest scheduled commercial flight, lasting less than one minute in ideal wind conditions. Another point in the network, Barra in the Hebrides, boasts the world’s only beach runway for scheduled flights. That service from Glasgow is marketed with the caveat ‘times subject to tide’.
Outside of its Scottish heartland, Loganair flies on behalf of Flybe to four airports in England (London Stansted, Manchester, Leeds Bradford and Norwich), Dublin in Ireland, Bergen in Norway, Vágar in the Faroe Islands, and the British Crown dependency of Jersey in the Channel Islands. Two of its routes are operated outside of Scotland entirely: Manchester-Norwich and Norwich-Jersey. 
Loganair also operates contract flights for oil and gas companies, as well as flying on behalf of Royal Mail. Its existing franchise agreement dates back to 2007 and involves the vast majority of aircraft being sub-contracted out to Flybe, whose Exeter-based management team takes full commercial control of network planning and strategy. >>

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